[CTC] NYT: Trump Targets Free Trade, and G.O.P. Follows Suit

[Arthur Stamoulis]

http://www.nytimes.com/2016/02/22/us/politics/trump-targets-free-trade-and-gop-follows-suit.html <http://www.nytimes.com/2016/02/22/us/politics/trump-targets-free-trade-and-gop-follows-suit.html>

Trump Targets Free Trade, and G.O.P. Follows Suit
By ALBERT R. HUNT | BLOOMBERG VIEWFEB. 21, 2016



Any doubts that Donald J. Trump <http://www.nytimes.com/interactive/2016/us/elections/donald-trump-on-the-issues.html?inline=nyt-per> has had a huge (as he might say) influence on the Republican Party were dispelled this month when Senator Rob Portman <http://topics.nytimes.com/top/reference/timestopics/people/p/rob_portman/index.html?inline=nyt-per> came out against <https://www.washingtonpost.com/news/powerpost/wp/2016/02/04/portman-to-vote-no-on-trade-deal> the Trans-Pacific Partnership.

There is no more respected member of what’s called the Republican establishment: Senator Portman, an Ohio lawmaker, is a confidant of the Bush family, a runner-up vice-presidential pick in 2012 and a former United States trade representative.

But Mr. Portman is up for re-election, and Mr. Trump has changed the dynamics of the trade debate. Mr. Portman voted last year to give President Obama fast-track negotiating authority on trade agreements, which was intended to pave the way for pushing the 12-nation Trans-Pacific Partnership through Congress. But this month he said he was opposed to the agreement.

Republicans used to be the protectionist <http://topics.nytimes.com/top/reference/timestopics/subjects/p/protectionism_trade/index.html?inline=nyt-classifier> party. They wrote the infamous Smoot-Hawley Tariff Act of 1930, which raised tariffs on imports. After World War II, when the United States emerged as a global superpower, both parties essentially embraced the nation’s role as a leader in the world’s economic recovery.

But a generation ago, Democrats, prodded by labor, began to change their stance because too many workers were being displaced by globalization. It was left to a couple of Democratic presidents, Bill Clinton and Mr. Obama, working with Republicans, to embrace and enact trade measures.

In this election season, however, Mr. Trump has set the agenda, and no presidential candidate is carrying a free-trade banner. He charges that America’s “political hacks and diplomats” have been taken to the cleaners on trade deals that have cost millions of jobs. He vows to undo Mr. Clinton’s North American Free Trade Agreement, dump the proposed Pacific Rim pact and go after Mexico, Japan and China on trade. He has suggested a 35 percent tax on cars imported from Mexico. He also advocated a 45 percent tax on imports from China. (He has denied that he made that proposal, but his words were captured on tape.)

Such statements horrify traditional Republicans. “Hearing this demagogue talk about a 45 percent tariff on Chinese imports is arrogantly insane, a clear path to the results of the old Smoot-Hawley Tariff of the ’30s — which made sure the Depression lasted for a decade,” said Bill Brock, a former Republican National Committee chairman and United States trade representative.

To be sure, a number of economists and trade experts have dialed back their unbridled enthusiasm for trade deals. The advantages are well advertised, and largely correct, but the problems for American workers are more severe than most free-trade advocates have acknowledged. This is especially true for those in manufacturing and low-skilled, older workers, many of whom are drawn to Mr. Trump.

Steven R. Weisman, a vice president of the Peterson Institute for International Economics, a research organization with a strong free trade bent, recently published “The Great Tradeoff: Confronting Moral Conflicts in the Era of Globalization,” which tackles this dilemma.

Mr. Weisman still supports pacts like the Trans-Pacific Partnership but says these will be achievable — politically and economically — only if “we address the workers who are getting badly hurt by the intertwined forces of technology and trade.” Trade deals, he argues, need to include better and more creative training programs for displaced workers, as well as other notions such as wage insurance, which enables trade-affected workers to take lower-paying jobs without losing lots of money.

Yet this sort of rational, balanced discussion is absent in the presidential election, which is dominated by the Trump view. South Carolina is a good example. Once a protectionist hotbed after its old-line businesses were devastated by imports, the state is now home to the plants of huge multinational corporations such as BMW and Michelin.

Still, surveys show that most South Carolinians favor a tax on imported goods to protect domestic jobs and that the state’s Republicans, even more than Democrats, are against the Pacific trade pact.

Mr. Trump was the runaway winner of the state’s Republican primary on Saturday. That’s a message that will resonate in financial and trade capitals around the world.




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